Second hand car loans are usually slightly above those of brand new cars. At the moment, the interest for used cars is around 2.65-3.00% per annum.
Be careful with the per annum interest rates though....if you calculated the total interest, you'd be surprised how much it actually comes to. For example, if you took a loan for $50k over 7 years, the total interest paid is actually over S$10k! Thats a lot of good money down the drain.
Depending on your situation, its not always advisable (in fact, usually unadvisable) to take a loan for too long a term. If anything happens to the car (and it sometimes WILL), you can't get rid of it. Lots of people have been caught by this before.
Take for example that you buy a car for $50k, and take a 6 year loan for $50k:
- At 3% flat interest, total amount payable in 6 years is $59k!
- Each month for 6 years, you'll have to pay $820 in instalment.
- After 2 years, you would have paid around $20k.
- This leaves S$(59-20) = S$39k left, owed to the bank.
Now, assuming that you need to sell it after 2 years of ownership, for whatever reason, you will have to immediately pay the bank S$39k. But after two years, you may only be able to sell/scrap the car for S$25-30k. This means that you have to top up with your own money to S$39 to pay the bank.
This is all personal preference, but for me, I try to dump in as much downpayment as I can afford and settle my fully loan in 3 years, if possible. This will allow me to be more financially free....I don't wanna become a "yes, sir" slave at work, fearing to lose my job, fear my boss, colleagues, customers, etc. In other words, a loan is actually a weakness created for oneself. Living in Singapore, we can't get away from loans.....but at least we can reduce them and manage them in a less risky manner.
Note also that there are many hidden costs in buying used cars. LTA fees for change of ownership can come up to over $1000 (depending on the value of the car). Repairs/maintenance just after taking over a used car can also easily come up to a few hundred bucks, if not much more (depending on the condition and how fussy you are). Then there is road tax, parking, ERP, petrol, etc etc).
Also, if you get a sports car like Skyline, insurance will be a killer (could be as much as $1500-2000 per year). Remember also that sports cars (and branded cars) will also usually need super high maintenance (fuel, repairs/maintenance, tyres, brakes, accessories, other mods, etc).
For my humble current vehicle, the cost of ownership PER MONTH currently (insurance, fuel, repairs/maintenance, road tax, depreciation, ERP, parking, traffic fines
, etc) is almost $2000!
Basically, if you're not driving now and used to taking public transport..... er....then better not to buy a car if you don't need one. Cos once you start driving, you're stuck (like me)
Its all still finally up to you though. Being a car lover myself, I know how tempting it can be. Here's wishing you luck...hoping you'll make the best choice for your own lifestyle.